Can a New Landlord Terminate Leases in NYC?

When a new owner acquires a commercial property in New York City, a fundamental question arises: Can the new commercial landlord terminate existing leases? 

The answer is not straightforward. Commercial leases are contracts governed by both their written terms and the laws of the State of New York. This post examines common scenarios—including lease terms, statutory protections, landlord negotiation strategies, and practical tips—with insight any commercial lease attorney would verify.

Understanding the Commercial Lease as a Contract

A commercial lease is, first and foremost, a private contract between the landlord and the tenant. Unlike residential leases, commercial leases provide fewer statutory protections to tenants, so most rights and obligations are dictated by what the parties themselves negotiate.

For example, clauses could specify:

• Early termination or “bailout” options
• Rights of assignment or sublease
• Notice periods for termination at the end of the term
• Penalty formulas for early exit

Absent a valid clause, a new owner does not enjoy any special statutory right to terminate a fully executed lease. Courts treat the lease like any other contract. A sale of the building typically means the new landlord steps into the shoes of the old one—the lease follows the property.

1. Break Clauses & Early Termination Rights

Many commercial leases include a break clause, sometimes referred to as a “bailout” clause, which allows early termination under predetermined conditions, such as payment of a lump sum or rent for a specified notice period.

These clauses vary widely:

• Fixed exit fee (e.g., 3–6 months’ rent)

• Notice requirement, such as 60–90 days in advance
• Conditions, such as business performance metrics or permitting outcomes

Only if such a clause exists and conditions are met may a landlord enforce early termination without breach.

2. Sale of the Building Doesn’t Invalidate Leases

Under New York Real Property Law, Article 7, Section 223, leases automatically remain binding upon the sale or transfer of the property. New landlords cannot unilaterally cancel contracts merely by purchasing the building.

Therefore, any claim that “new ownership allows immediate termination” is misleading—absent an express contractual clause, new landlords are bound by existing terms.

3. Holdover Tenants & At-Will Tenancies

What if a tenant remains in the space after lease expiration without signing a new one? Such tenants become “tenants at sufferance” or “holdover tenants.”

Landlords (including new ones) can terminate these informal tenancies with notice. Under RPL §228, a landlord must give at least 30 days’ written notice to terminate at‑will or on sufferance possession.

However, this only applies after the lease term has ended, not while there’s an active agreement.

4. Breach of Lease or Defaults

Even a new landlord can terminate a lease early—but only for tenant default, such as failure to pay rent, unauthorized use, or breach of obligations.

Commercial leases usually spell out:

• What constitutes default (rent, non-monetary breaches, etc)
• Notice and cure periods (e.g., 5–10 days for rent, 30 days for other defaults)
• Remedies: termination, eviction, collection of damages

A tenant can protect themselves with a “Yellowstone injunction,” halting eviction proceedings while contesting a default—but this right has become less reliable since a 2019 court ruling and is often waived in landlord-prepared leases.

5. No Right to Terminate for Personal Dislike or Profit

New landlords frequently believe they can cancel a lease if they receive a higher offer or simply dislike the tenant. That’s false. New landlords cannot break a lease to re-lease the space, raise rents, or do so due to personal disputes.

Without express lease terms, early termination requires valid legal grounds:

• Tenant default
• Lease-end and holdover status
• Bankruptcy or other statutory relief
• Mutually negotiated surrender

6. Negotiating a Lease Buyout or Surrender

Even when no break clause exists—or it's not triggered—a new landlord can often negotiate a lease surrender agreement. These are voluntary “deeds of surrender,” where the tenant and landlord agree to terminate on agreed terms.

Typical terms include:

• Lump‑sum payment (buyout)
• Release from future obligations
• Notice of eviction waived
• Landlord’s right to re‑lease immediately

A seasoned commercial landlord/tenant attorney drafts these carefully to protect both sides.

7. Sublease & Assignment as Alternatives

Many leases allow tenants to sublease or assign with the landlord's approval. A new owner can honor or negotiate consent.

If a tenant secures a solid replacement—ideally one who has been financially vetted—the landlord may accept the assignment rather than undertake eviction.

This shift keeps income flow without eviction risk, often saving both parties time and legal costs.

8. Statutory Notice Requirements Outside NYC

Although Manhattan and the five boroughs follow strict holdover notice rules, outside of NYC, commercial landlords may face 60 days’ notice for month-to-month tenancies of 1–2 years, or 90 days for leases older than two years.

However, these rules typically don’t affect fixed-term agreements under contract.

9. Lease Breaches by Landlord as Exit Strategy

In rare cases, tenants may provoke termination by constructive eviction—the landlord fails to maintain the premises, interrupts utilities, or harasses the tenant, thereby breaching the covenants.

Though more common in residential cases, a commercial tenant could argue that the lease has been frustrated or impossible to perform. However, commercial courts are less forgiving; rescue is unlikely without a dramatic failure.

A new landlord seeking termination could instead use an aggressive tactic: intentionally breach minor maintenance obligations to provoke tenant exit, but this is legally risky, commercially damaging, and likely to spark litigation.

10. Bankruptcy & Statutory Relief

If a tenant files for bankruptcy, the landlord’s rights may shift:

• Tenant may assume or assign lease under 11 U.S.C. § 365
• Landlord can object, but if tenant cures defaults and meets conditions, lease may stay in force

Bankruptcy can offer leverage—but is not a guaranteed exit for landlords.

11. Key New York Statutes & Rules

RPL §223

Lease survives the sale of property.

A lease remains valid even after the property is sold to a new landlord.

RPL §228

Termination of holdover or tenancy-at-will requires 30-day written notice.

New landlords must provide at least 30 days' written notice to end these types of tenancies.

Real Property Actions and Proceedings Law (RPAPL) §235-e

Notice required before eviction for nonpayment.

While primarily applicable to residential leases, it's considered best practice in all cases.

• Bankruptcy Code §365

Governs lease assumption or assignment during bankruptcy.

Explains how leases are handled when a party is involved in bankruptcy proceedings.

12. Summary: Can a New Commercial Landlord Terminate Leases?

• No, not unilaterally or simply because the property changed hands.
• Yes, for tenant default, provided proper notice and cure are given.
• Yes, under valid break clauses or if the tenant agrees to surrender the premises.
• Yes, once the lease expires and the tenant remains, the tenant must provide 30 days' notice.
• No, to chase a higher-paying tenant, absent contract terms.

13. Practical Advice for New Owners

Before buying:

• Retain a commercial lease attorney to audit all leases thoroughly.
• Identify any break clauses, surrender rights, tenant options, or non-competes.
• Consider the tenant’s sublease policy and assignment process.
• Check for upcoming lease expirations to plan future management.

After Purchase:

• Communicate early with tenants: outline ownership change, reassure stability or provide information about upcoming plans.
• Use negotiation—not confrontation—to propose lease adjustments, buyouts, or renewed terms.
• Be ready to litigate only when necessary, based on documented defaults.

14. Why Legal Counsel Matters

The mechanics of commercial landlord/tenant law in New York City blend contract analysis, statutory interpretation, and negotiation strategy. New commercial landlords navigating tenant termination or lease modification are advised to get sharp, experienced counsel.

A qualified New York City landlord attorney ensures:

• Proper notice and compliance with RPL §228 for holdovers
• Valid enforcement of defaults and cure periods under lease terms
• Statutory protections and risks under RPL §223, §235-e, and related law
• Sound drafting of surrender agreements or break clauses
• Solid strategies around subleases and assignments

Understanding Tenant Rights

A new commercial landlord in New York City is not free to break leases at will. Only when supported by contractual terms, statutory provisions, or tenant misconduct (or agreement) can termination be legally enforced.

Life gets simpler once a lease ends—then the landlord can choose not to renew and offer 30 days’ notice. But until then, the lease remains binding, even on a new owner. Every action—whether notices, defaults, buyouts, or modifications—should be conducted under the careful guidance of legal counsel. 

Engaging a skilled New York City landlord attorney early will ensure compliance, protect investments, and foster long-term tenant relationships.